Tax increases may be a solution to pay off debt, says study by the Ministry of Economy – Executive Digest

A study by the Strategy and Studies Office (GHG) of the Ministry of Economy, consulted by “Jornal de Notícias” (JN), reveals that in the future it will be necessary to cut expenses or increase taxes to pay the accumulated debt due to the response to the pandemic of the new coronavirus.

According to the “JN”, the GHG points to “a possible worsening of the future tax burden following the increase in public debt”, which will have a “recessive effect on domestic demand”.

In the study “Covid-19 – Portuguese Economy Resumption” it can also be read, according to “JN”, that “although the forced savings that are occurring during the crisis will be progressively reduced, with a temporary positive effect on recovery of the sectors most affected, this effect will not be enough to compensate for the fall in consumption associated with confinement and the reduction of income through the increase in unemployment and the expected increase in the tax burden ».

The “JN” mentions that the protection points to a debt of 134.4% of the Gross Domestic Product, while the OECD to 136%.

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